Muni Matters

Delaware County Faces a (Gulp) 24% Tax Hike

• Season 1 • Episode 2

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Multiple news sources report on Delaware County, Pennsylvania's proposed 23-24% property tax increase for its 2025 budget. The increase, driven by inflation and dwindling pandemic relief funds, faces significant public backlash. County officials cite rising costs and years of stagnant revenue as justification, while residents demand budget cuts and criticize past spending decisions. A proposal to sell the county's wastewater system to offset the tax hike is under consideration, but its feasibility and impact remain debated.

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All right, so let's dive into something that I think hits close to home for a lot of us, and that's property taxes. Yeah. Specifically, we're going deep on Delaware County, Pennsylvania, where they're proposing a 23% property tax hike for 2025. Wow. That's right. You heard that right. 23%. And that comes after a 5% increase just last year. So to help us unpack all of this, we've got a stack of news articles, council meeting minutes, and even some resident testimonies. Yeah, it's certainly a significant jump, and it's, you know, understandable why residents are concerned. So we'll explore the reasons behind this proposed hike and look at, you know, the potential consequences, particularly for those who might already be struggling to make ends meet. Right. So let's start with the basics. Delaware county is projecting a $397 million 2025, budget for but they're facing a $52 million deficit. So that means their expected spending outweighs their projected revenue by a pretty big margin. Exactly. And this isn't just, you know, overspending. A closer look reveals that Delaware county is dealing with what's known as a structural deficit, meaning it's a recurring imbalance stemming from really fundamental aspects of their budget. Okay, so it's not just like a one time thing, which makes this even more complex, but what exactly is driving this structural deficit? Well, one of the main factors cited by county officials is inflation. The cost of everything from food to fuel has been rising, and this has really put a strain on their budget. And they've given some pretty eye opening examples. For instance, the cost of food at the Fair Acres Nursing Home has gone up by 38% in the last five years alone. Oh, wow. And at the George W. Hill Correctional Facility, food costs have jumped by 18% in the past two years. Right. And it's important to remember that those are just two specific examples. But this inflationary pressure is impacting almost every aspect of the county's operations. Everything costs more. Everything costs more. Yeah. Now, this is where things get really interesting. Apparently, Delaware county hasn't increased property taxes in over a decade. They've actually been an outlier compared to their neighbors like Buckschester and Montgomery counties, which have implemented regular tax increases. That's a crucial piece of the puzzle. While holding off on tax increases for so long might have seemed appealing in the short term, it's likely contributed to the financial strain they're facing now. It's kind of like ignoring a small crack in your foundation. Eventually, it can turn into a much bigger, more expensive problem. So essentially, they've been kicking the can down the road for years, and now that can has become a huge obstacle they can't ignore. Precisely. And in addition to the inflationary pressures and years of stagnant tax revenue, Some point to a couple of controversial decisions made by the county that have added to the financial burden. You're talking about the creation of a new health department and the deprivatization of the county prison. Those were big decisions that some residents are now linking to increased spending. Exactly. While these initiatives might have had their merits, they also came with significant costs. The creation of a new health department required a substantial investment in staffing, infrastructure, and programming. And deprivatizing the prison, while potentially addressing concerns about private prison practices, Brought the responsibility for all associated costs back onto the county's shoulders. So these decisions, while well intentioned, have really added to the county's financial woes. But now they're in a situation where they need to find a solution, and fast. One of the options that they're considering is selling the county run wastewater group Del Cora. A private company, Aqua Pennsylvania, has offered to buy it for $125 million. Yes, that's right. And this is where things get really interesting. This potential sale has become a major point of contention, with some seeing it as a potential lifeline and others expressing serious concerns. Okay, so let's break this down a bit further. Yeah. What are the potential benefits of selling Del Cora? Well, the most obvious benefit is the immediate influx of cash.$125 million could go a long way towards addressing the current budget deficit and potentially give the county some breathing room to address other pressing needs. That makes sense. A quick infusion of cash could provide some much needed relief. But what are the potential downsides? Why are some people so concerned about this deal? Privatizing essential services like water and wastewater treatment is always a complex issue. One of the main concerns is the potential loss of local control. Once a utility is sold to a private company, it's no longer directly accountable to the residents it serves. So there's a risk that the focus might shift from public service to profit maximization, Potentially leading to higher rates or a decline in service quality. Exactly. And that's not just a hypothetical concern. There have been instances in other municipalities where private utilities have raised rates significantly after acquiring public systems. So that's why some residents in Delaware county are wary of going down this path. They're worried about the long term consequences, Especially for those who are already struggling to afford basic necessities. And let's not forget about the ethical considerations. Water is an essential resource, and some argue that it shouldn't be subject to the whims of the market. Right. They think that access to clean, affordable water should be a right, not a privilege dictated by profit motives. Exactly. But amidst these concerns, you also have those who see the sale of Del Cora as a necessary evil. They argue that the county is simply in too deep of a financial hole and they need to take drastic measures to avoid a complete crisis. Right. And those who favor the sale often point to Delcora's current debt, which. A little over $144 million. That's a lot. It is. And they said that this debt is unsustainable and that selling it to a private company would relieve the county of this burden. I see. So it's a tricky situation. On one hand, you have the immediate need to address this looming financial crisis, and on the other, you have these long term concerns about what could happen if they privatize this really important public asset. It's like being stuck between a rock and hard place. It really is. And this whole dilemma has really fueled a heated debate within the county council. It has. You have council members like Christine Reuter, who strongly advocates for the tax increase, arguing that it's essential to maintain critical services and address years of underfunding. And she's been pretty vocal about the conditions of county facilities too. Right? She has. She's mentioned things like cracks in the stairwell at the government center as evidence that they need to invest money now. And she's also been a big supporter of the county health department, especially since COVID Right. She's talked about how challenging it was to not have their own health department and how they had to rely on Chester county for help. Yeah, which makes sense. And she believes that having a strong public health system is essential. And she's willing to support a tax increase to make it happen. Exactly. But then you have council members like Kevin Madden who are more focused on responsible spending and long term planning. He's not a big fan of selling Del Cor as a quick fix. He is not. He thinks it's a decision that can't be easily reversed. Yeah. And he's worried about the lack of transparency from Aqua Pennsylvania regarding long term rate increases. They've offered some initial rate caps, but who knows what will happen after those expire. Exactly. And then there's Elaine Paul Schaefer, who seems to be the most hesitant about the proposed tax increase. She gets that they need more Revenue. But she's also really concerned about what will happen to residents, especially those who are already struggling. She brought up a really interesting point about Aqu, Pennsylvania's history in other places. Yeah, like what? She mentioned Limerick Township in Montgomery county, where Aqua bought the water system and kept the rates pretty stable at first, but then after the rate cap expired, they raised them significantly. So that makes some residents worried that the same thing could happen in Delaware county if they sell Del Cora. Exactly. It highlights the risk that private companies could put profits ahead of affordability and accessibility. Right. And Schaefer also argues that Del Cora is already well run and doesn't necessarily need to be saved by a private company. She thinks that if they manage it well and invest in it, Delcora can keep providing good service to residents and stay under local control. So there are a lot of different opinions of priorities at play here. There are, and it's not about one side being right and the other being wrong. There are valid arguments on both sides of this issue. It makes it even more complex because you have to think about the residents who are understandably feeling anxious and uncertain about the future. Right. We heard from Mary McDonald at one of the council meetings, and she asked what a 23% increase would do for people in the county who live paycheck. To paycheck, which is a really good question. A lot of people are probably wondering the same thing. It is, and it really highlights how these decisions affect real people. It's not just about numbers on a spreadsheet. We're talking about people who are trying to afford their homes, feed their families, and just make ends meet. Exactly. And David Galach from Newtown Township said something similar. He talked about how a lot of families have to choose between spending $20 or having no Christmas. And this tax increase could make that even harder for them. These stories really show that policy decisions have real world consequences. They do. They're not just debates that happen in meeting rooms. They directly affect people's everyday lives. To be fair, the council members who support the tax increase do get that it'll be hard on people. They do. But they also emphasize the need to provide essential services and make sure the county is financially stable in the long run. Monica Taylor, the council chair, has talked about this as a balancing act. She knows the tax increase will be hard, but she also says they have to make tough choices to make sure the county has a future. It's a complex situation with no easy answers. No easy answers at all. And in the middle of all of this, you have the potential Sale of Del Cora looming over everything. It just adds another layer of complexity to an already difficult situation. It does. And it raises questions about the role of government, the balance between providing services and keeping them affordable, and the long term consequences of making short term financial decisions. Yeah. It really does feel like we just scratched the surface of all of this. We have. And it's a reminder that these local decisions, these seemingly dry topics like budget deficits and property taxes, they have very real consequences for people. Yeah, they do. And as we've gone through all of this, what really stood out to you? Was it the resident anxieties, the council members grappling with these tough choices, or the whole Del Cora sale with all of its pros and cons? Honestly, it's the fact that there's no easy answers here. Right. It's messy and nuanced, which is exactly what makes it so important to understand. I hear that. And for anyone listening who's thinking, well, this is just one county's problem, could this be a sign of broader trends? Yeah. Are other local governments across the country facing similar financial pressures? And are we going to see more of these tough choices playing out on a larger scale? It's certainly possible. Rising costs, declining revenues, and aging infrastructure are challenges that many local governments are confronting. Right. And as these pressures get worse, we might see more communities grappling with difficult decisions like tax increases, service cuts, or even privatizing essential services. And what about the role of citizens in all of this? What can people do to engage in these conversations and make sure that their voices are heard? That's a great question. Informed and engaged citizens are crucial for a healthy democracy. Attending council meetings, voicing their concerns, contacting elected officials, even just staying informed about local issues, these are all ways to participate in the process. Right. It's about holding our leaders accountable and working together to find solutions that work for the entire community. Exactly. And remember, these issues might seem complex and daunting at first, but understanding the basics can empower you to engage in these conversations more effectively. Absolutely. So as we wrap up this deep dive into Delaware County's budget crisis and the potential sale of Del Cora, it's clear that there's a lot at stake. The council is scheduled to vote on December 11, and their decision will have a huge impact on the county and its residents for years to come. Regardless of what happens, this situation is a really good example of the challenges that local governments are facing across the country. It is. Thanks for joining us on this deep dive. We hope you have a better understanding of the issues and that you'll engage in these conversations in your own communities.

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